Recent technology improvements relating to the use of renewable energy sources (RES) make various renewable energy systems (RES systems) more available and easier to deploy, even in urban areas. Governments' targets to further increase the portion of renewable energy in total energy consumption will result in ubiquity of both utility scale and residential RES systems. Residential RES systems have been encouraged through guaranteed feed-in rates. However, when a decrease in the cost of RES systems leads to more grid-parity, the government incentives will be less necessary and local energy consumption can become more economical. The local consumption of energy is also motivated by the independence from the grid and a devotion to green energy. On the other hand, a wider use of distributed energy resources (DER) also has its downsides due to the grid stability issues and an increased need for load balancing.
These issues with integration of RES stem from the intermittency and uncontrollability of renewable energy. Users of all types of RES systems, from the residential sector to the large-scale energy producers selling their energy in day-ahead markets, suffer from these two aspects of RES.
In order to mitigate these issues related to RES integration, many different approaches have been proposed. The most common approach is to use batteries as electricity storage to store any excess in energy generation for later use, when generation is not sufficient to meet the demand. However, the use of batteries is a costly solution and their capacity is never sufficient to perfectly mitigate the uncontrollability of RES. This means that the storage might not be big enough to store entire surplus, or the maximal discharge rate is not sufficient to cover a difference between demand and supply in a given moment. In such a case, the energy must be consumed from a backup source, which is normally an electric utility providing energy in the given area.